151 degrees. we came back about two hours later. it's probably about medium well. >> reporter: well done, matt. now let's see you eat it. ♪ and it burns burns burns >> reporter: jeanne moos, cnn, new york. ♪ the ring of fire >> jeanne moos, i love her. that's it for me, thanks very much for watching. i'm wolf blitzer in "the situation room." and "john king, usa" starts right now. thanks, wolf, and good evening. up first, breaking news. president obama shuttle diplomacy and talk of new momentum in efforts to raise the government's debt ceiling. first today the president met with democratic congressional leaders and then later the top two house republicans came calling at the white house, that meeting broke up moments ago. no breakthrough to report just yet and the fact that democrats and republicans aren't meeting with the president in the same room at the same time, that's proof enough they aren't even close, but there's suddenly a lot more talking going on in washington and at the center of the new discussions is a plan

put forward by a bipartisan senate group named the gang of six. most liberals don't like the gang of six approach because it would make cuts to social security and medicare. >> we are an anti-gang group. we are -- we're trying to suppress the growth of gangs. we think that it is not healthy for washington. most conservatives complain it doesn't cut spending enough and raises taxes too much. >> the gang of six is a five pages of sort of talking points. it's not an actual plan. >> but the president sees it as a framework for a potential -- potential -- breakthrough and perhaps because they like the other fallback options even less, the house republican leadership says it's at least worth talking about. let's begin with what happened tonight behind closed doors and how the new senate plan is changing the discussion. our chief white house correspondent jessica yellin and kate bald win are live at their posts and chrystia freeland, and the meeting with the republicans

which is the most important meeting just broke up. what do we know about what's happening behind/c closed door there at the white house? >> reporter: publicly the republicans can't talk about anything else except what they're dealing with, the cap, cut and balance proposal, but the idea is how do they get moved forward, john, and they don't want to openly talk about this fallback option, the reid/mcconnell plan, because there aren't the votes for it in their party. the other proposal, the other notion that's sort of out there is an idea of taking something gang of six-like, building a ga framework that has kind of targets and cuts, caps, and spending principles in it that's pretty -- it's sort of outlined but not detailed in legislation and has a big, big dollar figure around it. so, sort of the big plan. passing that along with a debt ceiling as sort of a big theory

option instead of this mcconnell/reid plan, but it's so vague, as you can tell, and nothing that i have as any sort of firm plan, just, like, something that's sort of out there in the ether, they just don't have a plan at this point, no one does, john. >> it sounds like, and some people at home are saying, my god, there they go into washington speak again. i'll try to simply phi it. they are trying to fit certain pieces together to get you to several trillion in deficit reduction and that seems to be where we are, a bunch ideas. i'll go over to the wall a little bit, because jess talks about the mcconnell plan, that would give the president the authority to raise the debt ceiling and maybe they would come up with a commission with spending cuts. that's one backup plan. another backup plan is the gang of six. and i want to bring up the gang of six yesterday we talked about that. they have some significant spending cuts. they include a trillion dollars in new tax revenues. they would make social security cuts, defense cutséçz%ñ and the, but everybody has objections. on the liberal side, kate, they

say touch the social security, changes to cost of living in social security, liberals would like more taxes and they don't like the medicare and medicaid changes and they think it cuts too much out of corporate taxes. that's why liberals don't like it. and conservatives said, paul ryan said not enough details. it's just a framework. they don't like the tax hikes. they don't think it has enough spending controls on entitlements, they don't think it does significant reforms to medicare and medicaid and the list goes on, they don't like the defense cuts and they don't think it slows government growth enough. so, kate, yesterday it seemed to be maybe some momentum here. today are people saying, oh, never mind? >> reporter: it seems that the momentum, it seems the gang of six themselves, they are definitely trying to push to gain more momentum, but we noticed a marked shift today, and i guess the enthusiasm surrounding it, it seems as you just laid out very well, there is stuff for people on the left that they don't like about it, stuff for people on the right that they don't like about it, and i'm hearing more frustration among especially senators i've heard this evening, john, people

saying if this is not going to be a solution to our debt ceiling problem, because it's simply as a package not going to be ready in time to vote on it ahead of this deadline, then why bring it forward now? it seems to be muddying the water and frustrating people more than working towards a solution. so, there was great enthusiasm yesterday especially among senators. there were some briefings today trying to get more people on board it seems and answering the questions that are out there, but it seems there are now more questions than answers in terms of the detail and the nitty-gritty of what is in this gang of six proposal, and i'm starting to see, me and my colleagues up here, the enthusiasm seems to be fading towards this proposal at this point. >> and so, chrystia freeland, help us understand the big picture here. a lot of people get nervous, well, the markets will get jittery, they see washington without a plan and the deadline less than two weeks away. but sometimes the chaos and confusion in washington is, i don't quite understand it,ive been here more than two decades, necessary before you get the clarity. is that where we're going or do you see it moving apart, not together?

>> well, let me offer you the market perspective. i think the market perspective, john, is what the markets really want is just for the debt ceiling to be raised. at this point with august 2nd really very close, the markets i think care less about what the content of the deal is and they care more about there just being some sort of a deal. i think it's very important to appreciate from a market perspective, this is an own-goal situation. there's no external force driving this crisis. this is a "made in washington" crisis, and particular for america's foreign creditors, and they're increasingly important. that just sort of it seems absurd to the world that america could tip the u.s. and the world economy into a crisis just because american politicians felt like it. >> and so, jess, let me go back to the white house, as this all plays out and people at home are watching, how does this affect me, some economists say higher interest rates, some economists say it could cause unemployment

to go up if the united states defaults, there's a disagreement about it. there's a let's have a process conversation, the president has the meetings today and now what, the congress has to work out a deal or are they due at the white house sometime definitive definitively? >> reporter: they say they will continue to talk. but may i point out that the president himself set a deadline of july 22nd as the date that he'd like a negotiation to be clear. he'd like a deal to be done. and that's two days from now. so, the fact that they continue to have these vague discussions where they're not seemingly any closer to a deal at this late date when they're still grasping for a big plan, very frustrating to some people i've spoken to today, some senior lawmakers, who are saying this is the time when they should be cutting bait and saying we cannot go for the big deal. this is when we should just be making a deal to raise the debt ceiling and put off deficit reduction for another day. >> and, chrystia, do you predict if we go past the president's deadline we'll see more market volatility? the market has been pretty

patient assuming we'll get a deal. will we see more volatility if we get to the end of the week and we still don't have one? >> i think the markets are going on what i should call the king philosophy of washington, which is there's a lot of sound and fury but at the end of the day they do reach a deal. i think what would scare the markets is if we started to hear more of what we were earlier in the month, which is some people saying, look, it's okay if we don't meet the deadline. some people saying, actually, you know, the debt ceiling stuff, it doesn't matter. it's just artificial, if we do hear that, i think you'll see a real market fear. >> we'll keep on top of it and see if we get any more inside information on the meetings at the white house. thank you all. >> let's continue the coverings the with a prominent conservative who is right at the center of the debt and deficit debate, if you think the republicans need to give some on taxes, you're not a fan of grover norquist, but if you believe the house republicans should reject the proposals with

taxes included, he sees things your way. is the gang of six proposal a framework of deal for grover norquist tonight, can it be? >> no. as you've been saying, it's not even written down. it's an essay. it was deliberately dropped yesterday in order to distract people from what the house representatives actually passed which was a plan which was actually written down. the president doesn't like it, the democrats don't like it, it dropped $2.5 trillion in real spending restraint, called for a balanced budget amendment with two-thirds required to raise taxes. with very serious tax caps in the future. i don't expect the president and reid to like it, but the whole thing about dropping the gang of six nonplan, nonwritten-down plan on top of it was to distract from the fact that the house has actually put something on the table and the senate has nothing. >> okay. but the house plan says no new revenues. the president wants new receive you ins. the republicans control the house. they just won it in an election fair and square, the democrats

narrowly control the senate, a democratic president, and jay carney said, look, we know you won the house, republicans, but we've got divided government, you've got to give. >> the republicans need to be willing to compromise, need to accept that they won't get 100% of what they want. if this is a two-party system in a divided government, and it requires compromise and bipartisan cooperation in order for big things to get done. the same is true for democrats. >> do republicans have to give the president to get something done or are you among those who say if we get to august 2nd and they don't have a beal, so be it? >> let's remember, republicans have always made it clear they're willing to compromise. the republicans passed a budget, the ryan roadmap, a real budget, and they fleshed it out through committees which reduces -- >> the president won't sign it, and they have to move off that. >> right. >> any revenues -- >> of course, not. the president knows that. he's known it for a year.

>> what happens august 2nd if we don't have a deal? >> if the president is so wedded to his left-wing ideology if he won't take something less than the $6 trillion in spending restraint and do $2 trillion or $3 trillion in spending restrai restraint, he'd rather close down the government if he doesn't get his tax increases, if he would like to have a hissy fight, the republicans put $6 trillion of spending restraint on the table and he's put nothing in writing on the table to save spending all he wants to do is talk about tax increases, that's not going to fly. he's not going to close the government over that. >> the president he won't, i'm sure of this, but if the president were to call grover norquist and the government, then, is faced with the scenario, i want to bring up the choices here, the government is faced with a scenario, it only has so much money, $172 billion, and it has to pay bills, pick, what would you pick? what would your priorities be as the government? >> of course, that's exactly the position that the president's trying to put other people in -- >> you don't think we're in this position?

is it important to pay social security recipients? >> yes. >> okay. let's do that. >> okay. >> what about medicare and medicaid? >> the answer -- look, the answer to each of these things is yes, which is why i'm a supporter of raising the debt ceiling -- it's a false dichotomy. >> give the president the power or do you need spending cuts to get it? if you only get this far out of the list and we're right there, we're out of money, veterans affairs, college tuition assistance, federal salaries, tax refunds, foreign aid, we don't have the money on august 3rd. how do we avoid that? >> what republicans have been trying to tell the president for six or seven months is they would like to have significant spending reduction and they're willing to give the president significant increase in the debt ceiling. leader boehner, speaker boehner in the house said you want $2.5 trillion because obama's overspent the debt ceiling by $2.5 trillion over the next year and half, if you want the $2.5 trillion increase we need the

decrease over the next decade. >> if the president said i won't give it to you without new revenues, you say the house republicans should hold firm even if we get to this scenario? >> the president of the united states i do not believe is so irresponsible that he's so wedded to this idea that he wants to raise taxes on people that he's going to close down the government and while he's overspent -- i mean, the reason we're dealing with this august 2nd is he spent $800 billion on the stimulus package that failed. he added a trillion dollars to domestic discretionary spending, he tripled the number of troops in afghanistan -- >> the question, we need to close it, going into the next week or so, who blinks if everyone? >> there will be a compromise. the president will get less money than he wanted and the republicans will get fewer cuts than they wanted, but they're not ra raising anyone's taxes. and hillary clinton speaks before indian. and michele bachmann's

migraines, will she be able to silence critics about her ability to be commander in chief? and smarter so you can get back to playing "angry birds." it lets you access business forms on the go, fire off e-mails with the qwerty keypad, and work securely around the world so you can get back to playing "angry birds." it's the android-powered phone that mixes business with pleasure. so let's get our work done, america, so we can all get back to playing "angry birds." the motorola expert from sprint. trouble hearing on the phone? visit sprintrelay.com.

minnesota congresswoman and republican presidential

candidate mishachele bachmann described more about her migraines. the letter said detailed lab work and brain scans all were normal and that letter went on to say, quote, your migraines occur infrequently and have known trigger factors of which you are aware and know how to avoid. when you do have a migraine, you are able to control it using two commonly prescribed medications. last night dr. sanjay gupta told us those medications in most cases are highly successful. >> but when i talk about treatment, it can be treated very easily, you know, miss bachmann said that 30 million people roughly in the country have these migraine headaches, it's right, and neurologists have gotten a handle on it if patients seek out treatments. >> has the congresswoman proven wrong the former aides that released the history and behind the cloak of anonymity

suggesting that he cannot handle the stress of the presidency? jeff, i said anonymity twice because i think it's reprehensible, if you challenge somebody's fitness to serve you should stand up and do it publicly. but despite the way it was done, it's a legitimate question, if she has a condition in the past that caused her to miss votes, has she ended the discussion by releasing the letter and this new information? >> it seems to me she's ended the discussion, but the bigger question is how many more things like this are out there. she has a lot of former advisers and a lot of former aides. it's been widely reported and well discussed that she's had a lot of turnover in her congressional office, so clearly there are people who have worked for her in the past, who are not eager to see her have a successful presidential bid, so it seems to me that this episode is over. but going forward, i mean, i've seen her out there on the campaign a lot. she has a lot of energy. on the fourth of july i was at a

parade with her. she was running so fast, photographers were having a hard time keeping up. so, i would think that this would have settled the matter. more interestingly is how her rivals responded to this today. >> let's listen to some of that, let's listen to the contrast here. i would ask the control room to listen to me so we get the order right. first the former massachusetts governor, two former governors, that's why i'm saying like this, but former massachusetts governor, mitt romney, he was asked about it, he was pretty straightforward. >> there's no question in my mind that michele bachmann's health is in no way an impediment to her serving as president. she and i have different views on issues and we'll campaign in various states and express our views, but her health should not be an issue in a campaign. i have no question in my mind. >> governor romney there. here's the somewhat different take, a little less declarative sense from the former minnesota governor tim pawlenty, my language, forgive, if mishawl

bachman bachm michele bachmann is causing anyone else a headache, it would be governor pawlenty in iowa. >> i don't have enough facts to comment on it, and i would certainly defer to the judgment of the medical professional. but setting that aside, all of the candidates i think are going to have to be able to demonstrate they can do all of the job all of the time. >> what does that mean? >> if you are going to be president of the united states, you got to be able to do the job every day, all the time. there's no real time off in that job. >> i don't know the facts and i'm not going to comment, but i just commented on it. and it's very clear as you point out that tim pawlenty is very threatened by michele bachmann and i think it was a very ungracious comment for him to make about her. if as he said he doesn't know any of the facts of her migraines, why would you say something like that? unfit to serve. challenge her on the issue. challenge her on her positions. challenge her on her votes in the house, whatever. >> and yet in there, jeff,

governor pawlenty makes the legitimate point, it's why a legitimate issue despite the way it was leaked, if you want to be president and get the nuclear football, you have to prove you're fit to serve and in good health. normally this comes up when somebody is closer to the nomination, you know, or when they're the nominee, they traditionally it's in your newspaper they go to the medical correspondent of "the new york times" and it's on the front page of the paper and everybody follows the coverage, they release the records, and are we in a different world, because michele bachmann if she were going this way in the polls instead of this way, i doubt it would have happened, but in the age of instant media, are candidates facing the questions a little bit earlier? >> i think they are. because the stakes are higher in the campaign. it's only july, but as you said, some of these republican rivals are shocked and surprised and frankly trying to do everything they can to compete with the congresswoman. but i mean, who knows who leaked

this. who knows what their motives were. but, i mean, i think it's -- i agree with gloria that the comments from governor pawlenty were probably not as gracious as they should have been. but it fits into a narrative of what he's been trying to build in iowa. >> right. >> it sounds very similar to what he said last week and the week before when i was out with him when he's saying he's really trying to get people to focus on who has more experience for the job. so, i don't know if he'll be saying that a lot more. i would think he wouldn't. >> and the key for the congresswoman is whether you think this is a legitimate issue or not when you're a candidate and people are asking about it at every stop, you want to talk spending cuts or health care or proposals, when they are saying what about your migraines, what about your migraines, it was important to act quickly. she made a statement yesterday and the letter from the doctor today, and important to act quickly especially in the 24-hour news cycle, do you think it's enough? >> no. i think it's going to come up and i think she has to be forthcoming and she started to talk about it and then she started to talk about the debt ceiling and other issues and,

you know, you have to confront these things head-on and say it's a legitimate question you ought to be asking. here's a letter from my doctor. i gave you that letter. we'll give you more later on, but don't sort of make-believe like it's not a question that's out there. so, i think this shows us a little bit about the early stages of the bachmann campaign how they handle this will be -- will be, you know, something for us to watch. but at least they did get the doctor's letter out there and so they get credit for that. >> gloria borger, jeff zeleny, appreciate your help. and major medical news for all american women. dr. sanjay gupta joins us with details for new recommendations for women how to combat breast cancer. [ female announcer ] goodnight gluttony, a farewell long awaited. goodnight, stuffy. goodnight, outdated. goodnight old luxury and all of your wares.

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important health news tonight for all american women. the american college of obstetricians and gynecologists has updated its breast screening guidelines, recommending mammograms at age 40. the change even more at odds with the u.s. government task force report just a couple years ago which suggested women in their 40s shouldn't get routine mammograms. let's talk it over with our chief medical correspondent, dr. sanjay gupta. doctor, number one, the main reasons, why this change, and how significant is it? >> well, i mean, they're looking at a lot of existing studies out there and that's where the change is coming from, oit pretty significant. the interesting thing is that, you know, if you look across the board, about 40,000 women a year will develop breast cancer in their 40s. that's the first thing to think

about. 20% of those women will die. again, talking about women in their 40s. they also noted as part of reviewing these studies that a cancer tends to grow faster in a woman earlier in life, so between -- in her 40s the cancer will grow a little bit faster which is why they felt they needed to screen a little bit more quickly. that's sort of bottom line. they know that earlier screening, 98% of women will survive five years if their cancer is found early. and they added it all up and said we should increase screenings annually starting at age 40. >> these are today's recommendations, we've got them up on the screen so everyone can see them. it's the number of cases and the cancer grows faster, the shorter sojourn time, the potential to reduce death. here's the next question, the mortality numbers, the incidence of breast cancer is highest among whites, but the fatality rates highest among african-american women. here's what i assume a lot of

women are asking tonight, why this change and why the conflict with the other recommendations just a few years ago that said, no, it's okay to wait until you're in your 50s? >> you know, this is one of those fascinating things in medicine. i reported pretty extensively on this a couple years ago. first of all, keep in mind that people are pretty much looking at all the same data and studies. it's not the data that's in question, it's the interpretation of the data. and most of the cancer organizations including the american cancer society, the college of obstetrics and gynecology that you're talking about even the american college of radiology had these recommendations beginning in the '40s. the task force was the only one to release a let's start these screenings in the 50s. you know, it's a balance and this is where public health hits individual health where the rubber meets the road toe so to speak. and there are misdiagnoses in the 40s. for something that's not cancer. that's a balance with finding, you know, the 40,000 cancers,

reducing that death rate, and keeping in mind, again, that the cancer grows faster in these younger women. let's catch it sooner. >> so here's the question i would have as a layman. number one, do the recommendations actually influence behavior? and number two, will they change how some woman out there watching how their insurance plan will deal with this issue? >> the first point is a really good one. i think the concern for a lot of people, look, if we say the recommendations are annually in the 40s, more women will get the mammograms that don't need them. in fact, as a practical purpose, it's the opposite problem. about 30%, about a third of women, still don't get mammograms who do need them, so this idea that will cause massives h s hahysteria, and wol get them needlessly, that's not likely to happen. many insurance companies see the guidelines like everyone else does, but on a state-to-state basis, the mammograms are covered for women whose doctors prescribe them, if they are prescribed annually starting at age 40, the insurance company

will typically cover it. it's very easy from insurance company to insurance company and state to state, but across the board that's pretty much what happens. >> i want to show one last thing here. i assume this is the biggest factor in the recommendation, the change, the survival rate, 98% have at least a five-year survival rate with early detection. i assume this is the driving force the earlier the better. >> you take that stat and you balance it with false positives and biopsies and in retrospect did not show cancer, all those things. but the 98%, 5-year survival rate and i'm speaking in part as a son of someone who has dealt with this, and i know you find these cancers early, you can deal with it. and, you know, my mom's living proof of that. >> dr. gupta, as always, appreciate your help. >> you got it. thank you. still to come, a feisty question time for britain's prime minister and secretary of state clinton raises eyebrows in china. but michelle obama draws fire from the traditional obama

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welcome back. here's the latest news you need to know right now. state and local law enforcement officials have been told to look out for threats targeting private utility facilities in the united states. the department of homeland security says it has no specific, credible intelligence, though, of an imminent threat. a source close to donald rumsfeld confirms to cnn several former top rumsfeld pentagon

deputies traveled to austin, texas, to brief governor rick perry on national security and foreign policy issues. minnesota's state shutdown is over. the state's democratic governor gave hupp on his bid for tax hikes. the republican legislature gave in a bit also. the federal reserve announced a regard $850 million fine against wells fargo for allegedly pushing borrowers with good credit into more expensive subprime mortgages. michelle obama praised executives of major retailers including walmart and walgreens for agreeing to make fresh fruits and vegetables available to stores in low-income areas. >> a fresh food section in walgreens might be a good solution for one community, while a farmers' market or maybe even a veggie truck might be the answer in another community. >> today's event sparks sol rare criticism of the first lady by big labor.

the service employees union and the food workers union took issue with her praising walmart saying its move into urban areas cost jobs. and among the retailers were old friends, the calhoun foods, we visited one of their stores in selma, alabama, when we traveled the country for cnn's "state of the union." ahead secretary of state clinton is in asia. what she said about india's role, and why china might take issue. that's next. c cap a day helps defends against occasional constipation, diarrhea, gas and bloating. with three strains of good bacteria to help balance your colon. you had me at "probiotic." [ female announcer ] phillips' colon health. [ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, global economy.

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secretary of state, hillary clinton, is traveling in asia and today nudged india in a way that is likely to cause concerns in china. secretary clinton noted india's growing economic power and said it was time now for new delhi to assert itself as more of a political force across asia. >> this is not, therefore, a time when any of us can afford to look inward at the expense of looking outward. this is a time to seize the opportunities of the 21st century, and it is a time to lead. >> why might beijing take issue with that? let's check in with cnn's fareed zakaria. let's start with the basic question, she's in india on her way to a regional security conference in indonesia where chinese actions will be at issue. why say it now? >> bethe united states is tryin to play a very careful game

here, which is to encourage other asian countries to assert themselves in a way that makes sure that asia does not end up dominated by china. but they can't do it in a way that suggests that we're trying to gang up on china or create any kind of a policy of containment of china. that isn't the goal. and so, one of the difficulties here is you're trying to get the asian countries, japan and india, principally, to assert themselves a little bit more, and certainly the indian case this is a vast continental nation, generally speaking, quite internally absorbed. so, the secretary is trying to push them to be a little bit more assertive, to take care of their own interests, to look beyond just india, pakistan, afghanistan. and i think, you know, it's the right way to approach it. it wasn't too explicit, but it was a way of nudging them, saying, come on, guys, you've

got to keep an eye on what's going on in asia right now. >> let's explore deeper. let's stay on the china part. you note she has to be careful, but she was also pretty obvious. she was talking about india's democracy and growing economy, and india can, quote, inspire others to follow a similar path of openness and tolerance. it's not hard to guess what she's talking about openness and tolerance, who is she talking about there? >> look, i think that this is a grand tradition of american diplomacy which is when we want to have a strategic relationship with china, we want to have a cooperative relationship with china but we do have our preferences and we've always said, every president, democrat and republican, for 30, 40 years, that, you know, when compared with dictatorships and closed systems, we prefer democracies and open systems. and so we're trying to make that association and make it plain. you're absolutely right, this is a -- this is a coded way of saying something about -- about

china. but i think it is really important to recognize that we're almost trying to be the catalyst here, to get other asian countries to do what they should be doing anyway, which is to be taking care of their own continent, to be taking care of the issues that will concern them. i think that secretary clinton correctly reads india as being somewhat self-absorbed right now, huge internal issues that they have. if you think democracy can get dysfunctional in washington, you should see what it looks like in new delhi sometimes. so, she's trying to get them to take a slightly broader view. big, messy raucous democracies like the united states and india have a tendency to be internally obsessed. >> what are the prospects for that? india has had economic growth in the recent years. you noticed that democracy can be pretty loud and raucous, perhaps even exceeding ours, but given the history and the culture and the traditions, is india likely to listen or is

india likely to say, no thanks, we want to enjoy our economic growth and we don't want to be a loud neighbor? >> it can be both, they've been internally obsessed and somewhat suspicious of the united states. let's remember that the united states for most of the cold war, backed pakistan, not india. the indian foreign policy establishment has a tendency to be in any case a little bit, you know, third world-ish and anti-american in its own ways. and so it's been a long fall in relations between india and the united states, a very -- begun by bill clinton, crucially improved by george w. bush, and now being further improved by president obama and secretary clinton. i think it's still a work in progress. you can see that they have some thorny issues with regard to the nuclear deals, you know, the indians are not being as forthcoming in allowing the american companies to

participate in what will be a vast indian market for nuclear energy. and as long as the arrow is moving in the right direction, i think we're probably doing well. when we deal with pakistan, we see all the problems of dealing with a country that is not really a democracy. with india you see all the problems of dealing with a country that is completely a porous, functioning, chaotic democracy, which means the government might have the best intentions but it can't get anything through parliament. >> you made a key point, as long as the arrow is pointing in the right direction, let's project forward. secretary clinton moves on to the regional security conference in the south china sea is a topic of concern as it has been, china doesn't like it when the united states has military exercises in the region and the united states doesn't like it when china says, this is our territory, get out of the way. where do you see it? >> pretty much as you described it. secretary clinton has managed to maintain the balance with regard to that as well. the crucial issue is the issue of freedom of navigation and freedom of the seas.

with regard to the south china seas. the chinese believe the americans have no business talking about it. the americans believe it's an international issue that you want to have freedom of navigation everywhere and china should -- the south china seas should not become a chinese lake. and mrs. clinton has been very firm in making that point. she noted in a speech in hanoi last night. i wouldn't be surprised if she makes it again. the chinese do not like it, but this is one of those cases where i think it actually helps matters if both sides express themselves clearly. unambiguously so there's no ambiguity as to where we stand on the issue. and i think mrs. -- and hillary clinton has taken the lead on some of these tough issues of drawing the line in terms of how you deter the chinese and how you reassure them and making clear we want a friendly relationship with china, but we don't want -- we don't want to acquiesce in a chinese takeover of the navigation routes, or the

key asian waterways. >> as she tries to advance these conversations, some of them about international economics, some about international security, how much when she sits down at a table at a regional meeting like this does what's happening here right now, about the debt ceiling, about the united states getting -- trying to get its fiscal house in order, how much does that complicate her work overseas? >> i think the general problem of american macroeconomic mismanagement and political paralysis has been a huge negative for the projection of american power. because, you know, the end of the day, even when people didn't think much of the iraq war and thought george w. bush's foreign policy was bad, they all believed that america had the most advanced capitalist economy in the world and basically that it was the best run. that the federal reserve and the s.e.c. and all of these bodies were state of the art. what they have come to believe in the last few years is that this whole thing was a house of cards. so, the sooner we can demonstrate to the contrary and frankly we could put together a

$4 trillion package that would essentially solve the short-term budget problem for the united states, it would put us on very firm macroeconomic footing, that would be a huge boost. but i'm sure it doesn't come out specifically in the meetings that no foreign minister is going to say to the secretary, by the way, you guys can't get your act together. but it is in the background. it is in the shad dougow. i can tell you in private conversations with chinese officials, it comes up all the time. they are often talking about how we have revealed ourselves to be not nearly as competent as we think we are and that only makes our arrogance more unbearable. >> fareed zakaria, interesting points as always. thank you, my friend. >> pleasure. parliament questions. david cameron's hindsight when it comes to the newspaper hacking scandal.

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or visit an rv dealer. go affordably. go rving. question time. for david cameron, a feisty time guaranteed. prime minister's too cozy with the murdoch empire media. and was too quick to hire someone close to the tactics. now coleson is one of ten people arrested so far in this tabloid scandal. cameron said if he knew then what he knows now, he would not have hired coleson.

>> it's not about hindsight, mr. speaker. it is about all the information and warnings that the prime minister ignored. he was warned. and he preferred to ignore the warnings. so that the country could have the leadership we need. why doesn't he do more than give a half apology and provide the full apology now for hiring mr. coleson and bringing him into the heart of downing street. >> what i would say to the gentleman is stop hunting feeble conspiracy theories and start rising to the level of events. >> the prime minister was quick to note murdoch and others had close relationships with and access to tony blair and gordon brown. and he took issues saying his

leadership abilities were compromised. >> to many people how he has acted in the last few years. >> yes. because which government has set up additional inquiry? this one. which government has made full there's a fully resourced and staffed up station? this one. which government is asking others to do the same. that is what this government has done. >> so just great political theater or a threat to cameron's political standing? john burns is live from london tonight with me. john to you first, it was great theater. we don't know where this is heading from an investigation standpoint. in the sense that prime minister cameron to perform, to advance

the austerity agenda, is that the biggest question here? >> it certainly is. it's the question that lurks at the edge of all of this. he did well today. he came out assertively. he met mr. miliband thrust for thrust. he survived the day. parliament went into recess. and he may have caught a kind of wave here in britain that this thing has kind of overwhelmed the country. overwhelmed the political agenda. and it's time to get back to particularly to the economic problems confronting britain and the rest of europe which you know are severe. >> and the leader is challenged in something like this. whether you think it's over the top, i think there's a lot of volume. probably a lot of hyperbole.

the question is how does he perform when tested? how did he do? >> i think he did well. this is the most difficult day for him. he came under heavy fire in the most important debate so far of his time as leader of the country. but i think overall cameron put forward a very convincing performance. and i think he has weathered the storm temporarily. certainly this is a very big scandal. it's hit the very heart of the british political establishment. i don't think it's big enough to bring the prime minister down. i think he has survived. there will be more and more questions emerging about his judgment regarding the hiring of coleson. but overall, i do think this is the watergate style scandal that is big enough to bring him down, i don't think so. >> ten more people perhaps more arrested. more likely prosecutions. did the prime minister do enough

to say i made a mistake. i wish i knew more about mr. coleson. did it do enough to create a buffer that if there are convictions that can be traced back to him in terms of people he knew that he has enough of hey i dealt with this quickly? >> well, i think only for now and it may be some months before we really know the answers to that. certainly some weeks. because the two key issues which was the nature of his relationship with mr. coleson, whether there was anything more to keeping him in downing street than what he said, a second chance and so forth. and what he did, if anything, to support mr. murdoch's bid for the satellite broadcast. $12 billion bid for britain's most lucrative private television operation. now, those are issues that were

thoroughly gone over. but there are police inquiries. of course now the press are all over this story. and if in the course of the next weeks or months it turns out that cameron has misled parliament, has not told the whole truth about this kwb either one of those things could be the end of his time at downing street. >> as an analyst of british politics, what's your biggest question? >> what do you need to know next in. >> i want to know how cameron will lead the country with the economic situation in europe, these are the big questions of the british public. i think the scandal is series, but in the eyes of the british people, they want to move on now and face the issues britain is facing as an international power. i think they will now look at the prime minister to lead the country, put the